CUNA Mutual Group, of Madison, has approved nearly 800 private student loans over the past several months in testing a new student lending program.

The program, called CompleteEd, will offer student loans through credit unions and directly over the Internet, said Jeff Meyer, vice president of product development.

He said the full student lending program could begin as early as next spring, depending on testing results and national economic conditions.

CUNA Mutual, which funds the private student loans, also continues to offer federally guaranteed student lending through credit unions. The government insures federally guaranteed loans in case borrowers fail to repay them. CompleteEd is a separate program without federal guarantees.

Meyer said the private student lending market has grown from less than $2 billion a decade ago to $20 billion today, driven in part by the number of students going to college and higher costs for a college education.

Growth of private student lending could be slowed by recent increases in loan limits on federally guaranteed loans, said Richard George, president of Great Lakes Higher Education of Madison, a federal loan guaranty agency.

Great Lakes also works with private lending programs, but George said students should take out federally guaranteed loans first because they generally have fixed interest rates and more favorable terms.

Meyer said CUNA Mutual spent more than a year studying the market before launching the test program during the summer.

"We felt this was a great opportunity to serve our credit unions and their members," he said.

The private student loans require cosigners and the interest rate, based on the prime rate, depends on the credit history of the cosigner and other factors, Meyer said.

Summit and Great Wisconsin credit unions of Madison, which plan to merge next month, participated in the testing program.